WIREDGOV

The Financial Action Task Force’s plans for cross-border payment transparency are welcome, but this ambition without safeguards may undermine financial system access.

In late April, the Financial Action Task Force (FATF), the global anti financial crime watchdog, brought together representatives from the private sector to discuss the implementation of changes to FATF’s Recommendation 16 (R16) and support the development of Guidance. It also announced that broader public consultation on the Guidance is expected in 2026.

The revisions to R16 (also known as the ‘Travel Rule’) were adopted almost a year ago, at FATF’s June 2025 plenary. Yet, as with many similar revisions to global standards, the real test is not the text but how it will be interpreted and implemented. FATF seems to recognise the challenge; whether it has the cure is yet to be seen.

In substance, the revisions to R16 clarify responsibilities within the payment chain: introduce standardised requirements on the information that must accompany cross-border peer-to-peer (P2P) payment messages above USD/EUR 1,000; add new requirements for institutions to make use of emerging technologies to protect against fraud and errors; and refine the scope of payments for the purchase of goods and services. Taken together, the changes are an important step in modernising payment transparency.

However, as highlighted by CGAP, elements of the revised R16 carry financial inclusion implications. Recognising this, Paragraph 2 of the revised R16 makes clear that it is not FATF’s intention ‘to impose rigid standards or to mandate a single operating process that would negatively affect the payment system or financial inclusion’. Yet, in practice the impact will depend on how jurisdictions interpret and operationalise the requirements once FATF issues its detailed guidance (expected to finalise by October 2026).

The accompanying explanatory note confirms that the guidance will address inclusion-sensitive challenges, such as the treatment of missing or partial information, concerns related to addresses in rural/remote areas and operationalisation of the de minimis thresholds. What is unclear is how these commitments will actually get reflected in the guidance.

In jurisdictions with currency volatility, the same transaction may fall above or below the threshold within a matter of days, creating uncertainty

In February, the Centre for Finance and Security at RUSI convened a roundtable to explore how guidance could better incorporate inclusion considerations, coming up with the following concrete proposals.

Click here for the full press release